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Chicago's 3-Year Funding Scheme Vetoed by Oversight Panel

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And Jerome Van Gorkom, chairman of the authority, expressed doubt that the school system will open next fall without additional state revenue generated by proposed income-tax increases. (See related story on this page.)

The Chicago board was told to submit a revised long-range financial blueprint in mid-July, taking into account action by the General Assembly to increase state or local revenues. The legislature's scheduled adjournment is June 30.

The School Finance Authority, created three years ago to oversee the school system's climb out of insolvency, must approve both an annual budget and a three-year financial plan before schools can open. Doubts about the fall opening of school--and some "creative accounting" to get schools open--have become an annual rite of summer in Chicago.

The city's school board has projected a deficit of $202 million in the next fiscal year without increases in revenue and without salary hikes for teachers. (See Education Week, May 4, 1983.)

"The reason we can't approve the plan is that the projected deficits are so huge, no viable financial plan can be put together," Mr. Van Gorkom explained.

Besides containing no salary increases, the board's financial plan ends the controversial "pension pickup," under which the district pays the 7-percent retirement contributions for teachers.

Robert Healey, president of the Chicago Teachers Union, said the organization plans to press for salary increases to offset the wage freeze teachers accepted for this year. And he said the continuation of the board-paid pension costs is "an essential for us."

Temporary Setback

Meanwhile, the school board suffered at least a temporary setback in the legislature when the Senate Elementary and Secondary Education Committee stalled board-sponsored measures to raise the district's property taxes, despite a personal appeal from Superintendent Ruth B. Love.

The committee, chaired by a Chicago Democrat, is holding the legislation until the newly elected mayor, Harold Washington, reviews the package. The bills are worth about $130 million to the district.

Ms. Love, in her testimony before the Senate committee, urged a $156-million increase in state support for her district in addition to the local tax increase.

She had earlier announced an across-the-board hiring and wage freeze designed to save the district $2 million in the current fiscal year. And she outlined a proposed budget reduction of $160 million for 1983-84, including staff salary cuts, increased class size, payless school days, cuts in fringe benefits, and reduced desegregation expenses.

"I come to you not asking that you 'bail out' Chicago public schools," Ms. Love told senators. "For the last two years, we have balanced our budget. Over the past three years, we have reduced the budget by $150 million and eliminated 10,000 jobs.

"However, we are preparing ourselves for reductions if adequate funding is not forthcoming--severe reductions that will indeed affect our efforts to insure equal-in-quality education for all children."--don sevener

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